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Q:
Jim agrees to act on Kit's behalf, subject to Kit's control, and Kit trusts Jim to so act. This describes a relationship between
a. a business and its competitors.
b. a government and its governed.
c. a parent and a child.
d. a principal and an agent.
Q:
Delite Candy Company hires Elton to sell Delite's products in a certain area. Delite agrees to pay Elton a salary, plus commission, for a trial period. They also agree that Elton can sell using any methods and during any hours that seem appropriate. The key factor in whether Elton is Delite's employee is
a. the amount of Elton's salary.
b. the control Delite has over the details of the work.
c. the length of the trial period.
d. the title that designates Elton's position.
Q:
Laurel borrows $150,000 from Marketplace Mortgage Loans to buy a home. The financing documents require Laurel to maintain the property, obtain homeowner' insurance, and pay all property taxes and other assessments through the lender. With respect to these terms, a court is most likely to
a. enforce them.
b. refuse to enforce them.
c. rescind them.
d. rewrite them.
Q:
A clause in a contract between United Timber Corporation, a U.S. firm, and Wang, Ltd., a Japanese firm, specifies that disputes over the contract will be adjudicated in the United States. This is
a. a domestic-dispute clause.
b. a forum-selection clause.
c. an adjudication clause.
d. an arbitration clause.
Q:
KupaJava hires Lola to manage one of KupaJava's seven drive-through coffee stands. KupaJava agrees to pay Lola a salary, plus commission. KupaJava stipulates the standards that should be observed, the goals that should be attained, and the methods that should be used. Lola is most likely KupaJava's
a. employee.
b. independent contractor.
c. principal.
d. work for hire.
Q:
Rita borrows $30,000 from South State Credit Union. South State accepts Rita's equity in her home as collateral, which can be seized if the loan is not repaid on time. This is
a. a home equity loan.
b. an adjustable-rate mortgage.
c. an interest-only mortgage.
d. a violation of the law.
Q:
Community Trust Bank provides Devlin with a mortgage to buy a home. The rate of interest is fixed for seven years. At the end of that period, a large payment for the entire balance of the mortgage loan is due. This is
a. a balloon mortgage.
b. an adjustable-rate mortgage.
c. an interest-only mortgage.
d. a violation of the law.
Q:
Omega, Inc., a U.S. firm, and Wallaby, Ltd., an Australian firm, enter into a contract that does not have forum-selection or choice-of-law clauses. Litigation between Omega and Wallaby over a dispute involving this contract may occur in
a. Australia only.
b. Australia or the United States, but not both.
c. Australia, the United States, or both.
d. the United States only.
Q:
Oscar is Precise Service Company's chief executive officer. On Precise's behalf, Oscar solicits business, hires and fires workers, and handles the finances. Precise pays Oscar varying amounts, depending on his "needs." Oscar is most likely
a. a principal.
b. an employee.
c. an employer.
d. an independent contractor.
Q:
Tracy borrows $30,000 from Secure State Bank. The lender accepts Tracy's equity in her home as collateral, which can be seized if the loan is not repaid on time. With respect to any proceeding that occurs if Tracy fails to make the payments, this loan is subordinated. This means that it
a. takes a higher priority.
b. takes a lower priority.
c. has the same priority as the primary mortgage.
d. fluctuates with the market value of the property.
Q:
To resolve a dispute between Amy in Boston and Chris in Denver, E-Solution, like most online dispute resolution services, would apply the law of
a. the jurisdiction in which the complainant is located.
b. the jurisdiction in which the respondent is located.
c. the state of California.
d. none of the above.
Q:
Bubbly Soda Company hires Carlo to work on Bubbly's shipping dock, checking outgoing loads and dispatching Bubbly's drivers. With respect to Carlo, Bubbly is most likely
a. an employee.
b. an agent.
c. an independent contractor.
d. a principal.
Q:
Molly files a suit against Nick. They meet, and each party's attorney argues the party's case before a judge and jury. The jury presents an advisory verdict, after which the judge meets with the parties to encourage them to settle their dispute. This is
a. a mini-trial.
b. a summary jury trial.
c. court-ordered arbitration.
d. early neutral case evaluation.
Q:
Consumer Mortgage Loans provides Demi with a mortgage to buy a home. Under the terms, Demi can choose to pay only the interest portion of the monthly payments and forgo paying of the principal for five years. This is
a. a fixed-rate mortgage.
b. an adjustable-rate mortgage.
c. an interest-only mortgage.
d. a violation of the law.
Q:
Genetic Seed Company hires Howie to work on Genetic's shipping dock, accepting deliveries and dealing with other companies' drivers. With respect to Genetic, Howie is most likely
a. an agent.
b. an independent contractor.
c. a principal.
d. a work for hire.
Q:
Ace Manufacturing Company and Eagle Supply Corporation agree in writing to submit a dispute to arbitration. The Uniform Arbitration Act
a. dictates the terms of the agreement.
b. provides the means for enforcing the agreement.
c. sets out the proper subject matter of the agreement.
d. voids the agreement as a violation of public policy.
Q:
Jan and Kyle sign a contract that provides that if a dispute arises, they will submit to arbitration. A dispute arises, but before it goes to arbitration, Jan files a suit against Kyle. The court will likely
a. hear the suit and then order the parties to arbitrate.
b. hear the suit without ordering the parties to arbitrate.
c. order relief without hearing the suit or compelling the parties to arbitrate.
d. order the parties to arbitrate.
Q:
Ozzy is an officer of Prudent Financial Corporation. Ozzy serves in a representative capacity for Prudent Financial's owners. With respect to binding Prudent Financial to contracts, Ozzy is
a. an agent and has the authority.
b. an agent but does not have the authority.
c. not an agent and does not have the authority.
d. not an agent but does have the authority.
Q:
Franz asks Gateway Mortgage Credit for a loan to pay for the purchase of a home. With a poor credit score and a high current debt-to-income ratio, Franz does not qualify for a standard mortgage. Gateway is most likely to provide
a. a deed in lieu of foreclosure.
b. a home equity loan.
c. a subprime mortgage.
d. a workout agreement.
Q:
An agency can terminate once its purpose is achieved.
Q:
ABC Personnel Corporation and Data Assembly, Inc., have their dispute resolved in arbitration. The arbitrator makes a mistake in a conclusion of law. This is a ground for a court to
a. review the merits of the dispute.
b. review the sufficiency of the evidence.
c. set aside the award.
d. none of the above.
Q:
Ridgeline Bank provides Stanley with a mortgage to buy a home. The rate of interest is fixed for three years and then adjusts annually. This is
a. a fixed-rate mortgage.
b. an adjustable-rate mortgage.
c. an interest-only mortgage.
d. a violation of the law.
Q:
Liberty Bank provides Michelle with a standard mortgage with an unchanging rate of interest to buy a home. Payments on the loan remain the same for the duration of the mortgage. This is
a. a fixed-rate mortgage.
b. an adjustable-rate mortgage.
c. an interest-only mortgage.
d. a violation of the law.
Q:
A principal is liable for harm caused to a third party by an agent who commits a tort while acting in the scope of his or her employment.
Q:
AutoMaker, Inc., in California, and All-Cars Dealership in Washington, D.C., agree to have their dispute resolved in arbitration. They choose to have the law of New York govern their agreement. This is a ground for a court to
a. review the merits of the dispute.
b. review the sufficiency of the evidence.
c. set aside the award.
d. none of the above.
Q:
A deficiency judgment requires a borrower to pay the amount of debt remaining after the collateral is sold.
Q:
World Tech Corporation and Global Supplies, Inc., have their dispute resolved in arbitration. The arbitrator meets several times with World Tech's representatives to discuss the dispute outside the presence of Global's representatives. If these meetings substantially prejudiced Global's rights, this is a ground for a court to
a. review the merits of the dispute.
b. review the sufficiency of the evidence.
c. set aside the award.
d. none of the above.
Q:
A principal is responsible for all intentional torts committed by an agent.
Q:
A borrower has the right to purchase the property after default by paying the full amount of the debt, plus any interest and costs that have accrued.
Q:
A principal is not liable for an agent's fraud unless the agent has the apparent authority to commit torts.
Q:
Jim files a suit against Kay. Before going to trial, the parties meet, with their attorneys to represent them, to present their dispute to a third party who is not a judge but who renders a legally binding decision. This is
a. arbitration.
b. litigation.
c. mediation.
d. negotiation.
Q:
If a loan is not paid within a reasonable time after a notice of default, the borrower will receive a notice of sale.
Q:
Under the doctrine of respondeat superior, an agent is liable for the principal's negligence.
Q:
Sid files a suit against Tina. Before going to trial, the parties, with their attorneys, meet to try to resolve their dispute. A third party helps them to reach an agreement. This is
a. arbitration.
b. litigation.
c. mediation.
d. negotiation.
Q:
In a judicial foreclosure, the lender is allowed to foreclose on and sell the property without judicial supervision.
Q:
A disclosed principal is not liable to a third party for contracts made by the agent acting outside the scope of his or her authority.
Q:
Miles files a suit against Nina. At the trial, each party's attorney presents the party's case before a judge who hears the dispute and renders a legally binding decision. This is
a. arbitration.
b. litigation.
c. mediation.
d. negotiation.
Q:
Under a deed in lieu of foreclosure, the property is conveyed to the lender in satisfaction of the mortgage.
Q:
When an owner is unable to make mortgage payments, a lender may agree to a short sale.
Q:
The Oklahoma Supreme Court rules against Pat in a case against Quik Mart Corporation. Pat files an appeal with the United States Supreme Court. The Court does not hear the case. This
a. is a decision on the merits with value as a precedent.
b. indicates agreement with the Oklahoma court's decision.
c. means that the Oklahoma court's decision is the law in all states.
d. means that the Oklahoma court's decision is the law in Oklahoma.
Q:
A principal is not liable to a third party for any contract made by the agent acting outside the scope of his or her authority.
Q:
If a principal does not ratify an unauthorized contract, the principal is not bound.
Q:
Brad files a suit against Corporate Industries, Inc., in a Delaware state court. A state court system typically includes
a. a state supreme court and trial courts only.
b. a state supreme court, intermediate appellate courts, and trial courts.
c. intermediate appellate courts and trial courts only.
d. trial courts only.
Q:
Before a principal can ratify a contract, the agent must withdraw from the deal.
Q:
Forbearance is a process that allows a lender to legally repossess and auction off the property securing a loan.
Q:
Child's Play, Inc., sells a toy with a dangerous defect. Drew buys the toy for his son but discovers the defect before the child is injured. Drew files a suit against Child's Play. The firm's best ground for dismissal of the suit is that Drew does not have Eric didn"t make this change. LM added to list of changes going to Sue.
a. certiorari.
b. jurisdiction.
c. standing to sue.
d. sufficient minimum contacts.
Q:
Before a principal can ratify a contract, the principal must know all of the material facts involved in the deal.
Q:
Federal law encourages private lenders to modify mortgages so as to lower the monthly payments of borrowers who are in default.
Q:
Lora files a suit in Michigan against Ned over the ownership of a boat docked in a Michigan harbor. Lora and Ned are residents of Ohio. Ned could ask for a change of venue on the ground that Ohio
a. has a sufficient stake in the matter.
b. has jurisdiction.
c. has sufficient minimum contacts with the parties.
d. is a more convenient location to hold the trial.
Q:
If a principal does not ratify an authorized contract, the principal is not bound.
Q:
Foreclosure is the postponement, for a limited time, of part or all of the payments on a loan in jeopardy of repossession and sale.
Q:
Ira files a suit against Joy in a Kansas state court. Joy's only connection to Kansas is an ad on the Web originating in Louisiana. For Kansas to exercise jurisdiction, the issue is whether Joy's ad represents
a. commercial cyber presence in Kansas.
b. general maximum conduct in Kansas.
c. sufficient minimum contacts with Kansas.
d. virtual business solicitations in Kansas.
Q:
If a homeowner defaults, the lender has the right to foreclose on the mortgaged property.
Q:
In considering the scope of an agent's implied authority, the test is whether the agent reasonably believed that he or she had the authority.
Q:
The case of Able, Inc. v. Baker is heard in a Connecticut court with original jurisdiction. The case of Charlie v. Delta, Inc. is heard in a Connecticut court with appellate jurisdiction. The primary difference between original and appellate jurisdiction is
a. the subject matter of the cases that the court can decide.
b. whether a case is being heard for the first time.
c. whether a case is brought by a citizen or by a business.
d. whether the court is exercising in personam or in rem jurisdiction.
Q:
There are additional disclosure requirements for a higher-priced mortgage loan.
Q:
A lender can make a higher-priced mortgage loan based on the value of the consumer's home without verifying the consumer's other credit obligations.
Q:
For an agent's implied authority to be effective, a principal must confirm it in writing.
Q:
Paula, a resident of California, owns a farm in Iowa. A dispute arises over the ownership of the farm with Don, a resident of Nevada. Don files a suit against Paula in Iowa. Regarding this suit, Iowa
a. can exercise diversity jurisdiction.
b. can exercise in personam jurisdiction.
c. can exercise in rem jurisdiction.
d. cannot exercise jurisdiction.
Q:
Harry, a resident of Indiana, has an accident with Jane, a resident of Kentucky, while driving through that state. Jane files a suit against Harry in Kentucky. Regarding Harry, Kentucky has
a. diversity jurisdiction.
b. in personam jurisdiction.
c. in rem jurisdiction.
d. no jurisdiction.
Q:
The average prime offer rate is the rate offered to the least qualified borrowers as established by a survey of potential borrowers.
Q:
The equal dignity rule does not apply to a corporate officer who, in an ordinary business situation, acts on behalf of his or her firm.
Q:
Arbitration clauses are seldom found in contracts governing the international sale of goods.
Q:
A power of attorney can be given only to an actual attorney.
Q:
A lender can make a higher-priced mortgage loan based on the value of the consumer's home without verifying the consumer's ability to repay the loan.
Q:
Unless otherwise agreed, the result of an online dispute resolution proceeding may not be appealed to a court.
Q:
A power of attorney is a written document.
Q:
Negative amortization occurs when the monthly payments are insufficient to cover the interest due on a loan.
Q:
A mini-trial is a private proceeding in which each party's attorney argues the party's case before the other party.
Q:
Express authority is authority declared in clear, direct, definite terms.
Q:
Lenders can require balloon payments for loans with terms of five years or less.
Q:
A borrower has a right to rescind a mortgage within three business days.
Q:
Mandatory arbitration clauses in employment contracts are not enforceable.
Q:
A principal owes an agent a duty of ratification.
Q:
There are additional disclosure requirements for a loan that carries a high rate of interest or entails high fees for the borrower.
Q:
A court's review of an arbitrator's award may be restricted.
Q:
In mediation, the mediator proposes a solution that includes what compromises are necessary to reach an agreement.
Q:
A principal owes an agent a duty of accounting.
Q:
An agent can take advantage of an agency relationship to make a "secret" profit.
Q:
Mediation is adversarial in nature.